Good morning, ladies and gentlemen and welcome to the Perry Ellis International Third Quarter of Fiscal 2014 Conference Call.

Before we begin, I would like to remind you that some of the comments made on the call, either as part of the prepared remarks or in response to your questions, may contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such information is subject to risks and uncertainties as described in the press release and in documents that we have filed with the SEC.

Joining us for this call from Perry Ellis are, George Feldenkreis, Chairman and Chief Executive Officer; Oscar Feldenkreis, Vice Chairman, President and Chief Operating Officer; and Anita Britt, Chief Financial Officer. I would now like to turn the call over to Mr. George Feldenkreis. Please go ahead, sir.

George Feldenkreis

Thank you. Good morning and thank you for joining us. We concluded the third quarter with a 6% decrease in revenues over last year and an adjusted loss of $0.15 per share. I'm extremely disappointed with this performance. A number of factors contributed to this past quarter poor revenue and earnings.

First, while we expected in July to exit several private label programs, some retailers accelerated even further reduction, resulting in a larger drop in sale that was forecasted. What we did not expect is that our replenishment of vendor managed inventory programs were substantially cut back, in response to business slowdown in late August and September. A number of those programs are now swinging back to accelerate shipment, but obviously too late to benefit the third quarter.

Our direct-to-consumer business was plagued by low inventory and poor retail traffic, resulting in low conversion in our store during Q2 and Q3.

Compared to Q3 of last year, comp sales -- comp store sales decreased by 3.7%. This trend has been reversed at our Perry Ellis outlet stores. And sales have improved considerably at our Penguin retail stores.

Under the new leadership of Mr. Phil Rodman, former VMM of Amazon, New York, Perry Ellis retail and e-commerce performed well in Q3 and we expect to finish the year with better result than we anticipated a couple of months ago.

We do need to remember that this year has 1 week less than last year and comparables would not align on a daily basis.

On the expense side, increases in our occupancy cost associated with the consolidation of our office and business units in New York offset many of the profit improvement that we will have made in the Perry Ellis business. While it has been painful, we expect to realize substantial benefit from this consolidation going forward.

On the plus side, among the many positives that did happen, our Golf business had another great quarter and continues to build market share and momentum, especially now with the strong performance of the Callaway golf products. Callaway is on its way to becoming again the number 1 Golf brand.

Yesterday, we announced our new agreement with Jack Nicklaus. Not only is he a golf icon, but a sports icon worldwide and a great American. This new partnership enhances our position as the premier golf apparel company in North America.

Our Penguin wholesale business is having the best year we have had in a while. The Rafaella division, though still below last year in revenues, increased its profit dramatically by reducing markdowns and improving on the quality and saleability of its products. We feel that Rafaella is now on the right track toward a good fourth quarter and a great new year.

Our Perry Ellis leather and bottom business continued to grow and perform very well.

Our Nike Swim business continues to get better every year. Oscar will comment on this and will explain the many growth opportunities that our company has now and going forward.

The licensing division had a great quarter and is having a great year. Our projection for this year would result in our income increasing from about $27 million to approximately -- from $27 million to approximately $29 million, a 7% increase. This show the strength of all the brand that we're currently licensing, especially Perry Ellis Laundry and Penguin.

Our international division continued to do very well. During the quarter, we announced that Mr. Stanley Silverstein, previously the Executive Vice President of international strategy and business development at Vernacle join us President of licensing and international development. In the few months since Stanley joined us, he has made important contribution to the company, and we look forward for him to spearhead our international expansion in Europe, Asia and other countries.

Revenues at our U.K. operation were up by 19% during the quarter and profits were up considerably from Q3 due to a combination of better wholesale sales, better retail sales and better expense management.

We have expanded our licensing agreement with Callaway, which will allow us to sell the brand all over Europe, the Middle East, Africa and Latin America. We're making investment in our organization in Europe to build our golf team and golf platform. We will provide more information about it during the fourth quarter call. We will be taking over the Callaway U.K. operation, as of December 1, and we expect to have some products shipment by January of next year within our Q4.

Our directly comp business grew by 22% during the quarter, and is up over 15% for the year. E-com business with our brick-and-mortar retailer are growing consistently each quarter. Our business with pure e-com retailers like Amazon and Zappos is excellent and has grown by 65% compared to last year. We continue to invest in our E-Com business and we are very satisfied that our brands are resonating so strongly with our consumers in the Internet.

It is the best way to connect with Millennials, which is a big focus in our strategy to maintain and increase the relevance of our brands through all demographics.

Brands are more important than ever in this highly evolving internet age. You need brands to be recognizable when consumers go on search engine and that is besides we will continue to build solid, recognizable, stretchable brands.

Our financial continues to be stronger than ever, with current assets of about $393 million versus total liabilities of $340 million. We have the balance sheet to support very strong growth for the company and a debt-to-equity ratio of 27.7%.

There is a lot of talk about what happened with the consumer. There is no question that consumer spending was hurt at the beginning of the end of the year by increasing taxes and continues to be affected by unforeseen financial events. Having said that, we must also look at the drop in gasoline prices this year, above $50 billion compared to a year ago, which is definitely helping the consumer. We also have the lowest mortgage interest rates and payments in decades, which would bring substantial savings to the consumer plug very low inflation. We have an optimistic view of the consumer going forward, and we feel that it would be a good Christmas.

We need to remember that the technology revolution required an investment in iPhone, iPad, Androids and other instruments of social network. But at the same time, customers get hooked on services that cost more than like Netflix, Pandora et cetera. This has reduced available dollars to spend in apparel for the time being.

We need innovation. And this is what we are continuously striving for, innovation and improvement in products to get the consumer to buy our products. There is no question that tech services out of sales than the home-improvement have reduced consumer apparel spending this year as evidenced by yesterday report on sales compared to last year. We continue to adjust our business to the new reality, and we remain as flexible as ever, flexibility is crucial for the future.

There is a lot of conversation about this being a promotional activities more than previous year. I think that promotions are here to stay. And will be about the same as last year. This will not change the American consumer used to promotion that are now available, not only from brick-and-mortar, but through e-com as well and that's easier than ever to access. The American consumer is always looking for bargains and better prices and this will not change promotional activity will remain up to Christmas and during the year. It's a fact of life.

All in all, while we regret the fact that we could not deliver the result that we expect, we know that we have a very strong company, both financially and in the quality and strength of this brand and its business.

We will continue to grow with the many assets we have and will invest to acquire and other asset that we need to deliver on our strategic plan. We will demand accountability from our associates to make sure that they perform according to our expectations and your expectations.

Thank you very much for your patience. And I want to reassure you that we expect good things to happen next year. Thank you. Oscar?

Oscar Feldenkreis

Thank you, George. Good morning, all. I have been looking forward to speaking with you about our company and how we are progressing to restore growth and improve profitability.

Similar to much of the retail industry, we are not immune to the headwinds of the declining mall traffic in a difficult retail environment, which factors outside of our control. That said, the key to our improvement is addressing a number of factors that we can control.

Before addressing individual business results for Q3, there are macro points to address. The business climate today is very different and more competitive than it has ever been. We understand that in today's world, strong brands and quality products, that is available to the consumer, where and when they want it, in stores, on the web or through mobile devices is key. We continue to focus on building strong brands, targeting our core customer, delivering exceptional product, investing strategically in real estate, creating compelling marketing campaigns, building collaborative partnerships. We must remain laser focused on the levers of the business that will positively impact our business for today and for the future.

We also know that the overall business must realize improved profitability. We are scrutinizing at each business unit closely to assure both top line bottom line are being maximized.

We have a portfolio of incredible brands that will enable our organization to move forward with confidence and connect with a diverse global consumer base.

We offer unique products, tailor our assortments to our loyal consumers and deliver the creative messaging that resonates with each unique lifestyle and personality that our brands reflect. Now let's touch upon specific areas of business.

First, Perry Ellis. The brand continued to improve that retail throughout the third quarter. The positive momentum was driven by the dress segments of the business.

Entering the fourth quarter, we see additional opportunities in dressy sportswear collection products. In addition, the gift category will have a much stronger presence this holiday season. We are working closely with our retail partners, in terms of funding these opportunities as they continue to be cautious based on the current retail environment and are looking to keep stock and receive levels in line with sales. However, at this point, our partners are pleased with the improvement in our performance and see the opportunity in further growing their assortments. We are currently seeing mid-single digit increased plans for spring and early summer bookings. This provides some validation that our performance is improving.

Golf wear. We continue to invest in our global golf portfolio where each brand represents a unique market positioning, directed towards a golf lifestyle consumer. We are well diversified for the long-term growth and opportunities.

Our team has been exceptional, firing on all cylinders. We have built brands, found placement in over 19,000 doors and expanded our category offerings to not only include Men's, but Ladies and Accessories as well.

We are focused on our 2 core priorities with golf. First, in global expansion, which George detailed during his Callaway golf apparel agreement discussion. This is second is to offer quality lifestyle brands within a good, better, best hierarchy.

Our golf brand have delivered solid performance across all channels of distribution, reaching many demographics and targeting various fits, including Slim and Big and Tall.

As we look to Q4, we see retailers expanding their product assortment, as well as adding core items to replenishment in an effort to drive higher sales productivity.

In Callaway, beyond our expanded golf global reach, we are experience a growth at the green grass level, targeting the premier country clubs in the U.S. and launching with Dick's Sporting Goods for the holiday season, as well as will be in all 150 of their doors by spring. We continue to innovate with our OPG series of products, with enhanced performance properties. With the Ben Hogan sales continues to be strong, we are looking to grow into new categories for fiscal 2015, including golf accessories. We have received great reaction from Walmart retail stores as well as online. Walmart Canada is also excited about the introduction of Ben Hogan in 2014 and is open to review categories of expansion for the future.

We are also launching a Ben Hogan Signature, a better line for spring 2014 into a range of retailers such as the PGA TOUR superstore, Bon-Ton and Amazon, which will provide a full line of products ranging from apparel to golf accessories.

Lastly in golf, you know, we are probably announced a long-term license agreement with Jack Nicklaus for the USA, Canada and Mexico. Jack is a sports icon, who personifies the golf lifestyle. His legacy and loyal fan base expands the globe. This addition to our already strong portfolio of golf brands makes it even more powerful leader in this category. We are well poised to gain market share as retailers expand their golf lifestyle footprints with a meaningful assortment of golf brands such as Jack Nicklaus.

Turning to women's, Rafaella business continues to be solid and is performing at or above plan at retail. Our pants business continues to be the driving force at retail. As mentioned in previous calls, we are focused on growing the replenishment business, which has proven to be a good strategic move. We're also launching Rafaella Sport into 200 doors with key partners, including Lord & Taylor, Belk and, Bon-Ton, among others. Product will be in stores February 2014.

The reaction from our retailers have been very positive regarding the lifestyle expansions of the Rafaella brand. Based on the success of Rafaella, we're expecting to add shop-in-shops in select doors with key accounts for spring 2014.

Market share grab has been earned based on the success of the brand in a very competitive landscape. They're currently seeing positive higher single-digit increases in bookings for spring 2014, again, validates the performance of the brand.

With respect to Original Penguin, our millennium focused brand, the new management team is executing very well. We are adjusting strategies for the short term while laying out a foundation for the brand's long-term profitability and continued international success.

On the domestic wholesale front, we have gained market share in Nordstroms, expanding into additional stores. We have also gained share in existing doors as shops-in-shop have been expanded.

Crossing into Europe, we had an outstanding reception of the new Original Penguin denim line in specialty stores and see this as a nice expansion opportunity in a very productive market.

Finally, Nike Swim. We remain on track to have our best year ever with Nike Swim, driven by performance and youth-inspired product, improved merchandising, packaging and the power of the Nike brand. Sales has been growing nicely driven across many distribution channels, including team specialties, sporting goods, department stores and Internet. Categories experienced the greatest growth, are women's, men's and accessories.

In summary, we are confident that we are on the right road to achieve improved results in the near and long term. With that overview, I would like to ask Anita Britt to provide you with more color on our financials.

Anita D. Britt

Thank you, Oscar and good morning, all. I wanted to start out by saying that we all recognize that we have a long road ahead to rebuild confidence in our company model. We will achieve this incrementally quarter-by-quarter. You have our full commitment that we will do everything in our power to drive the financial performance of the company. George and Oscar have outlined some of the actions we are taking to improve our performance. We are intensely focused on delivering improvement in that performance and returning our company to generating consistent and sustained rates of growth. We look forward to updating you on our progress in the months ahead.

An integral part of our strategy is to capitalize on the international opportunities associated with our portfolio of powerful brands. You heard that George and Oscar detail some of the initiatives underway to achieve this objective. At the same time, you heard strategic steps to address businesses that underperformed this year such as direct to consumer.

As you will appreciate, our international expansion women will necessitate investment in personnel and platform infrastructure. We will do that as prudently as possible while identifying opportunities to reduce costs in other areas to offset our international investments. To achieve this objective, we are further accelerating our ongoing infrastructure review, with the goal to identify meaningful reductions in overhead. This will allow us to invest these savings in our international expansion without incremental overhead. We are also evaluating financial actions that we hope to announce shortly to reduce our overall cost of capital.

Now I'd like to turn and provide a brief update on the quarter and the remainder of the year. We view this year as a year of transformation starting with the renewed fashion focus for our collection businesses, Perry Ellis and Rafaella.

As Oscar discussed, we are improving with each season, but there are still a lot of progress to be made.

We also entered this year with the focus on improving profit margins, improving product performance and reducing markdowns in our business. In order to improve our gross margins, we also made a strategic decision to reduce private label businesses, which carried lower margin and takes time, energy and resources away from our core brands.

In total, we exited over 20 million of private brands sales during the year. This will put private brand at approximately 6% of revenues by our year-end. As you recall, we also exited smaller businesses during the prior fiscal 2013, which took out over $30 million from our prior year's revenue base, but which did have a residual spillover of approximately $8 million last year as we exited these businesses. We believe these decisions are important longer-term to position us for margin expansion. We also believe this is integral as we have seen over the last year pushback from retailers to hold or delay receipt. Offering a lifestyle brand that is carried by a broader group provides us more flexibility.

Turning to our segment. Our Men's, Sportswear and Swim segment recorded revenues of $158 million for the quarter as compared to $165 million in the prior year. Within this segment, we realized a 2% increase in golf apparel revenues, which included a 42% increase in the Callaway channels, which was partially offset by planned exits in our Top Flight brand, which we no longer carry.

Our Perry Ellis collection sportswear business performed in line with our plan. Our largest decline was experienced in the mid tier, with proprietary brands down 15% as that channel experienced more softness and retailers worked aggressively to manage inventory levels.

Total international in the quarter increased by 23%, led by Europe with strength in Original Penguin as George talked about, as well a solid growth in Mexico with both Nike Swim and our golf brand.

Our women's sportswear segment recorded revenues of $37.9 million as compared to $45.1 million in the prior year. Receipts were planned on in Rafaella after we had earlier shipments in Q2 and increases in that quarter. We did degenerate margin expansion in the business as performance at retail continued to improve.

In our direct to consumer segment, revenue totaled $18.2 million for the quarter as compared to $18.7 million for the same quarter in the prior year. We were encouraged by our direct e-commerce business which recorded a 23% comp increase for the quarter as we fully anniversary-ed the full price strategy across our sites implemented in Q3 of prior year.

Our retail stores saw 3.7% comparable store sales decrease. While we did witness an escalation in the business in August, consumer traffic declined in mid-September and then picked up slightly in October. Lighter consumer traffic impacted our stores, most noticeably in the Original Penguin full-price stores, which are mall and street based, while our Perry Ellis stores are predominantly upscale outlets as you know.

Finally, on the licensing side, we registered a 7% increase to record licensing revenue of $7.4 million for the quarter, driven by the strength of our Perry Ellis, Original Penguin and Laundry brand.

Moving on to gross margin for the quarter. We saw margins even with prior year at 32.1% as compared to our original guidance for a 100 basis point expansion. We experienced expansion on our collection businesses. This was offset by a lower contribution from direct to consumer, which impacted margins as well as the impact from lighter shipments in our proprietary brands versus our original plan.

Finally, seasonal swim goods weighed negatively on margins as we liquidated the product during the quarter from the first half of the year.

SG&A totaled $68.4 million for the quarter and included approximately $1.1 million for costs associated with streamlining within several of our business segments as well as other strategic initiatives. Included in the strategic initiative, we completed the sale of one of our warehouses during the quarter. Net of these costs, SG&A totaled $67.3 million as compared to adjusted expense of $63.5 million in the prior year. The increase for the quarter reflects additional investment in brand marketing, e-commerce photography and higher occupancy cost associated with our consolidated New York offices.

Now turning to the balance sheet. Our net debt position totaled $144 million, reflecting a net debt to total capitalization of approximately 27.6%, a very comfortable level that provides us a lot of flexibility to operate our ongoing business as well as to support our strategic plans.

Receivables for the quarter totaled $149 million, a 4% decrease over prior year. Our aging is extremely strong and the overall health of our retailers is solid.

Inventories ended the quarter at $166 million as compared to $183 million at year end, and $157 million in the prior year. Inventory turnover was even at 3.7x, and inventory management continues to be a key focus for us by business as we look to drive greater efficiencies. We also continue to see the health of our inventory very current as our aging is in solid shape.

For the year-to-date period, we used $6 million in operating cash flow, principally due to declines in our overall accounts payable. And capital expenditures totaled $19.5 million for the year-to-date period, principally driven by the investment in our New York office consolidation as well as new retail stores.

In terms of our updated outlook for fiscal '14, as we reported last week, we continue to expect revenues in the range of $960 million to $970 million. As we previously announced, we are forecasting soft to mid tier and direct to consumer revenues, reflecting the trends that we have seen in Q3 and forecasting them into Q4.

By business for the year, we expect Men's wholesale and Swim business revenues in a range of $703 million to $707 million. This reflects Men's wholesale in the range on $543 million to $547 million. We expect Perry Ellis to be relatively even to down slightly, Golf to increase in the mid to upper teens, and the total of our other businesses to be down mid singles.

Swim revenues are expected to increase in the mid single-digit range to $83 million to $85 million, driven by the strength of the Nike brand. And international revenues are expected in the range of $74 million to $76 million, reflecting continued growth in the U.K., Mexico, as well as Canada.

In our Women's sportswear business, we're expecting a range of $145 million to $148 million. We expect Rafaella to increase slightly, with offsets in our other dressing contemporary businesses. Direct to consumer is expected to be in a range of $83 million to $85 million. We reduced our comp expectation for the second half to download the mid-single digits within our range of guidance.

Our expectation for e-commerce is to increase 25% for the fourth quarter, in line with Q3.

And finally, licensing is expected to be up now in the high single-digits to just over $29 million. We expect gross margins to expand by 50 to 60 basis points for the year, to approximately 33.5%, driven by higher full priced selling and lower promotional support in our collection sportswear business, as well as higher margins in our golf lifestyle businesses.

Margin is slightly tempered from original guidance, given the impact of a lower direct the consumer comp contribution from plan. SG&A is anticipated to increase in the 5% to 6% range, consistent with prior guidance.

And overall, we continue to expect adjusted earnings per share in the range of $0.95 to $1.01. We expect full-year depreciation and amortization to approximate $13.3 million, slightly higher than previous expectations due to the timing of placement of capital additions into service, interest will range $14.9 million to $15 million, and our tax rate should be 34% on an adjusted basis.

In addition, we expect our shares outstanding to be in the range of 15.3 to 15.4. And during the third quarter, we did repurchase 267,000 shares for a total purchase price of approximately $5 million. We now expect our cash flows from operations for fiscal '14 to generate approximately $40 million for the year. And we expect inventories to continue to increase -- to decrease into year end, and we continue to focus on accelerating the turnover throughout this year. With that overall -- overview, I'm going to turn the call back to the operator and open up the call for questions.

Question-and-Answer Session

Operator

[Operator Instructions] And we'll take our next question from Ronald Bookbinder with The Benchmark Company.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

George talked about the reverse of the comps in the Perry Ellis outlet. What is so different between Q3 and Q4 that you're seeing a marked reversal now?

Oscar Feldenkreis

Ron, it's Oscar. The reversal on to Q4 is management. Bringing on Phil has been fantastic. Phil is a season's veteran retailer and he's doing an excellent job. He's turned around our e-com business when he first started, that was his first responsibility , and he has taken over now the Perry outlet stores, responsibilities done an excellent job in turning it around. So I think it's more towards the management of having Phil on board recently.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

And you mentioned in the press release localization of the stores when it comes to merchandising.

Oscar Feldenkreis

Yes, we have stores in the south. We have stores in the west, and we have stores in the Midwest. So making sure that they have the right, appropriate inventory, though in South Florida making sure that we have short sleeve product, this product that is not as heavily in weight or is not fall oriented, which is we don't wear sweaters here all year around, we would rather sell more shirts and pants. And expanding, of course, as I mentioned, on our dressy components, to our suit separate business has been fantastic, our dress pants, our dress shirt business, neck wear many of the dressy components that have arrived into the stores in the fourth quarter are actually doing extremely positive, and we see that as a positive momentum going into the holiday season.

Anita D. Britt

And I would add to, Ron, in the month-to-date, what we've seen too on the Perry Ellis side, an expansion in the margin. So the consumer coming through the door is reacting positively to the merchandise. And we are seeing a higher AUR. So that is a benefit on that we are seeing in Perry Ellis outlet stores as well.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Okay, great. And you talked about increasing gift. Could you give us some color on what types of gift?

Oscar Feldenkreis

Yes, we have a very strong program that we did last year, but we updated this year with Macy's. And the gift business for us has been a growing business. And it's basically a product that fits the consumer for demand consumer. So it's like a dot kit it's a product that basically a man uses and that business has been fantastic. We have aisle posts in the stores but that Macy's that you could walk around and you could see a lot of our gift items and that business has been very, very strong. And has been a focus for us going forward.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

And doesn't the gift business carry the higher margin?

Oscar Feldenkreis

Yes it does. And the sell-throughs have been stronger. So of course, the more we increase our gift business and our wallet business or small leather goods business, it does carry a higher margins. And that business is trending up with the leadership of George Bojo, who's done an outstanding job with his team in growing that business year-after-year.

Operator

We'll take our next question from Edward Yruma with KeyBanc Capital Markets.

Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division

Can you talk a little bit about the kind of forward outlook on the replenishment business? I know that you've taken a more guarded view on private label as that becomes a smaller piece of the business. But given some of the weakness you saw on replenishment, how should we think about that business longer term?

Oscar Feldenkreis

Replenishment business is here to stay. And it's a part or it's a component of every business because it is something that is becoming more and more important as we go more and more into the Omnichannel, replenishment will become a bigger piece or a stable piece of the business that you have to ensure that you have the capabilities to be able to do that business. I don't see replenishment downsizing whatsoever. Our replenishment business has been a good piece of our business and it's a very healthy margin business as that product usually is not marked down.

Edward J. Yruma - KeyBanc Capital Markets Inc., Research Division

Got it. And how should we think longer term about golf and its total revenue to the business. And I guess in the shorter term, I know when you did Callaway there was some near-term disruption. I think there were some issues with when you took that business on, how do we think about the Jack Nicklaus business and maybe cost that you need to incur as you begin to scale it?

Oscar Feldenkreis

In our golf business, in terms of outlook for the future, we see golf being a $500 million business for us over the next 3 years to 5 years. If we can get there quicker, we will. We're very excited about the opportunities and the market share opportunities that we can continue to take on. The Jack Nicklaus brand and business, we do not see a large increase in overhead. We feel that we can leverage the existing team. We probably will have to increase on design, which in order to ensure that there is differentiation and -- we don't cannibalize the other brands as we -- our PGA TOUR business is very strong, as well as our Callaway. Callaway, for us, has been fantastic. We're starting to see the expansion into green grass, as you know, we took over the green grass business late last year and this year has been the first season as we rolled it out, and we're very excited with the performance, not only of our product, but of course, all the excitement that surround the heart good side with all the new innovations in going forward that they're going to be developing as well as the international expansion that my father spoke about. We have been sending people over to the U.K., and working very closely with the Callaway European team, and we're very excited about evolving the Callaway lifestyle brand into additional territories on the international side as we move forward.

Operator

We'll take our next question from Jared Schramm with Roth Capital Partners.

Jared Schramm - Roth Capital Partners, LLC, Research Division

Looking at the Jack Nicklaus partnership, how many similar deals do you see in the Golf business on the horizon?

Oscar Feldenkreis

We basically, right now Jared, we're very happy with what we have. I don't think that we can take on any additional opportunities. We have a lot on our plate. Jack Nicklaus, we feel has a tremendous amount of opportunity. Not only to expand in the sportswear side, but also the clothing side. Jack Nicklaus used to do a sportcoat business, which was -- used to be sold in the clothing department. So some retailers have been requesting that as well. So we feel that Jack Nicklaus, not only in the USA, is also expanding it into our international side has a lot of opportunity going forward. So we're pretty set and what we have, plus the additional territories that we've taken on by Callaway, and going into maybe other product categories that fits the lifestyle of golf. Currently, today, we don't do any gifts. We have small leather goods opportunity. So there's just a plethora of opportunities for us to expand into and it's really prioritizing them and making sure that it doesn't hurt or cannibalize 1 brand or the other.

Jared Schramm - Roth Capital Partners, LLC, Research Division

Okay. And then looking at the Nike Swim business, could you elaborate or give a little more color in regards to the team sales process and how that's trending to date?

Oscar Feldenkreis

Our team business has been very good. We have a tremendous team led by Kim Tate, who has a tremendous amount of experience. He has brought in a brand-new organization and as well as we spent a lot on bringing in talented designers that are focused on innovation and developing key product that resonates well with the actual professional and youth swimmers. So that business has definitely grown. We see a lot of growth opportunities, and being able to take market share from other brands within the swim category. Our early reads on Nike Swim that we have delivered to the Southern store on the retail side have performed extremely well and a lot of the new innovations that we have brought on board. We're introducing a Hydro tee in Nike Swim and the reception has been very strong, and that's an updated product with a lot of features as we know consumers today are very cautious of sun protection. So it has a lot of attributes and a lot of innovation which is really what's driving the whole Nike Swim business from all channels of distribution to youth, to team, and as well as retail.

Jared Schramm - Roth Capital Partners, LLC, Research Division

Are you getting better traction among high school youth teams or colleges or are those spread pretty evenly across the board?

Oscar Feldenkreis

Yes, we are. And we are expanding into additional team dealers that have taken on a very happy to have Nike, which Nike today, with all the other products that they supply to schools, allows them now to have a rounded assortment, including the Nike Swim product.

Jared Schramm - Roth Capital Partners, LLC, Research Division

Okay. Lastly, maybe this is for Anita. Looking at CapEx for the next 12 months, is previous $19.5 million a good run rate to look at?

Anita D. Britt

Jared, how I would guide you looking at fiscal '15, there was a concerted expense for New York offices. So I think more realistically, we go back to sort of $10 million to call it $13 million, $14 million, somewhere in that range, for new stores, maintenance CapEx and those sort of related activities.

Operator

We'll take our next question from Ronald Bookbinder.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Anita, you just talked about CapEx $10 million to $13 million, does that include the investment that you all were talking about, building out international?

Anita D. Britt

From a CapEx perspective, any investment overseas on overseas in terms of shops, et cetera have not been included in that number at this point. Infrastructure related to people and so forth, obviously, would not be capital. But no, it's not included in that number at this point.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Okay. Jack Nicklaus, can you give us a sense as to where will be placed such that it doesn't compete and cannibalize your other golf brands?

Oscar Feldenkreis

Ron, we feel that it has -- the challenge of distribution will be retail brick-and-mortar, e-com. So hopefully, as we start taking on the license fee, we've had a lot of interested partners going forward. We'll have more color on that as we go into Q4. The reception has been very good and we see that as an opportunity to expand. And more and more retailers today are expanding their footprints on specifically, the golf. So many retailers today have maybe 2 to 3 brands in golf, and maybe those that do only have 2, are looking for a third. This product would be much more classical, as well as offer a different type of innovation on fabrics than what we are currently offering within our golf brands today.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

So would it be more classical and you mentioned before, that it could be a broader line with maybe some tailored clothing in there, we should be thinking about something like a Dillard's versus a Sports Authority?

Oscar Feldenkreis

I would say more -- it would probably department store, chain stores channel.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Okay, great. And what is happening with the Perry denim line? Can you give us an update?

Oscar Feldenkreis

We launched it in Q3. If you go to a Dillard's store, you'll see the America jeans and the product has been performing. We see areas like the Slim Fit, and some of the boot cut bottoms have done well. And we are seeing an opportunity there in adding dark rinses and other colors. And we feel that that's an area of opportunity for us because we're trying to expand, today a guy wears a nice sportcoat with a pair of jeans. So we're able to offer that in Perry as we expand our dressy collection.

Ronald Bookbinder - The Benchmark Company, LLC, Research Division

Okay, and lastly, swim accessories, what percent of swim revenue are they? And where do you think you can take it?

Oscar Feldenkreis

When we talk about swim accessories, it's basically goggles and that's the biggest size of the business. I would say goggles, today, are about 5% to 8% of the total business and feel that there's still a lot of opportunity there to increase as we expand the assortment. And also, we've added a lot of new innovative product. We have a great design team that today, is bringing on board lots of new innovative product. I think it could possibly a 10% to 12% piece of the business.

Operator

[Operator Instructions] And we have no further questions in queue. I would now like to turn the call over back to Mr. George Feldenkreis for any closing or additional remarks.

George Feldenkreis

Thank you very much. We promise that we're on top of this and we will do better. Thank you.

Operator

And this does conclude today's conference call. Thank you, all for your participation.

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